New Employee Authorization Transmittal (NEAT) Form

Transcription

1 301- New Employee Authorization Transmittal (NEAT) Form CalSTRS Manual New Employee Authorization Transmittal (NEAT) Form For retirement purposes, the NEAT form is DFS notification that a new employee has been hired at the district and a CalSTRS account may need to be established. Accounts are established as either member accounts or non-member accounts. After the NEAT has been approved for payroll purposes, it is distributed to the STRS unit who reviews the employee profile in Galaxy to verify the employee retirement plan code, AB340 boxes, and position type. This information will help the STRS unit correctly set up an employee s account with CalSTRS. Complete the NEAT form in its entirety and attach all applicable retirement forms. This will assist DFS in setting up all employees correctly from the start so no district charges or refunds need to be transacted at a later date. When NEATs are not required to be approved by DFS, the STRS unit is not able do any verification of the employee s profile and, therefore, the retirement coding cannot be verified. This may happen when a former classified employee accepts a certificated position with the same district or returns to work for the district. When the Retirement Unit is unable to validate an employee s retirement status, it may cause district charges/refunds due to incorrect membership status or member retirement formula at the time payroll was processed. These charges/refunds are logged in the control sheets and ed to districts on a monthly basis. June 2017 Section 301-1

2 301- New Employee Authorization Transmittal (NEAT) Form CalSTRS Manual Check the CalSTRS Secured Employer Website (SEW) for all new hires and any current employee who begins performing creditable certificated duties June 2017 Section 301-2

3 305- Full-Time Minimum Standards CalSTRS Manual Minimum Standards Per Education Code section , full-time may not be defined as less than the days/hours stated below. Classification Prekindergarten through grade 12 teachers and all others who work directly with pupils Time 175 days or 1,050 hours Principals, program managers, including advisers, coordinators, consultants, and developers or planners of curricula and administrators at a school site or district office 190 days or 1,520 hours Administrators at the county office of education (time includes legal holidays) Teachers in adult education programs 215 days or 1,720 hours 1,050 hours Minimum standards for community colleges: Classification Time Full-time Program managers and administrators Counselors and librarians Part-time, adjunct faculty 175 days or 1,050 hours 190 days or 1,520 hours 175 days or 1,050 hours 525 hours Instructors in adult education programs at a community college 875 hours Source: CalSTRS Employer Reporting Handbook FY13-14 June 2017 Section 305-1

4 305- Full-Time Minimum Standards CalSTRS Manual Reminders There are edits in Galaxy that prevent a salary schedule from being set up for less than the minimum day requirement of 175 days for full-time equivalency. The Service Desk staff can modify the salary schedule days to less than the minimum requirement with the approval of District Fiscal Services. When a request for salary schedule modification is made, please include the salary schedule to be modified, the number of hours that the schedule should reflect, and the hours per day that employees covered by the salary scheduled are required to work. The salary schedule will be approved for modification if the minimum hour requirement is met. District Fiscal Services will first approve the schedule with the minimum 175 days; the Service Desk will adjust the hours per the district s request. Employees who do not meet the minimum standards for full-time equivalency are not eligible to receive a full year of service credit. A salary schedule with less than the minimum standard would erroneously grant employees one full year of service credit. Examples: 175 day contract, 6 hours per day = 1,050 hours = 1.0 Service Credit 175 day contract, 4 hours per day = 700 hours = Service Credit Even if 4 hours per day is considered full-time for the employee, it does not meet the requirements for the employee to earn 1.0 years of service credit. June 2017 Section 305-2

5 310- Mandatory Qualifications CalSTRS Manual Mandatory Qualifications Defined Benefit Program Full-Time Contract Part-Time Contract Unless the employee is already a STRS member A new employee hired in a full-time position becomes a Defined Benefit (DB) member on the first day of employment. Do not combine multiple positions to determine full-time. A full-time position with any district makes the employee ineligible to participate in the Cash Balance (CB) Program. A new employee hired in K-12 to work 50% or more of a full-time contract, becomes a DB member as of the first day of the pay period following his or her employment to perform creditable service. An employee hired to work at a community college- CB employer or not, whose employment is considered temporary becomes a DB member on the first day of the pay period following their position becoming permanent. Cash Balance participant in K-12 basis of employment changes to perform creditable service for 50% or more becomes a DB member on the first day of the pay period following the change in the basis of employment. Basis of employment is defined as the standard of time over which the employer expects service to be performed by an employee in the position during the school year. Substitute Educator Retirement code 54 Part Time Hourly/Daily Retirement code 55 for K-12, 58 for CCD A non-member substitute educator who works 100 or more complete days in one district becomes a DB member on the first day of the following pay period. The following pay period must be in the same fiscal year. This statute does not apply if the position is with a CB district. A part-time employee hired on an hourly or daily basis who works 60 hours or 10 days in a single pay period and district becomes a DB member on the first day of the following pay period. The following pay period must be in the same fiscal year. This statute does not apply if the position is with a CB district. A temporary part-time employee at a community college district shall become a member as of the first day of the pay period following his or her employment to perform creditable service changes to permanent status. This statute also applies if the position is with a CB community college district References Education Code sections: 22501, 22502, 26400(e), 26107, 22503, Employer Directives , Employer Circular Volume 21, Issue 2, March 1, 2005 Source: CalSTRS Employer Reporting Handbook FY13-14 August 2018 Section 310-1

6 310- Mandatory Qualifications CalSTRS Manual Reminders Check the Secured Employer Website for employee s status with CalSTRS when hiring new employees and for current employees who begin performing creditable duties for your district. Part-time contract employee with a 50%-99% contract becomes a member the first day of the following pay period unless the employee is already a CalSTRS member. Part-time contract employees with a 50%-99% contract become members the first day of the following pay period unless they complete an ES 350 Permissive Membership form electing membership as of their hire date. If the ES 350 Permissive Membership form is not completed, the employee s first month earnings would be reported as non-member earnings with no contributions. However: o DFS recommends districts give employees with a 50%-99% contract the ES 350 Permissive Membership form when they are first hired so employees don t have their first month earnings reported without contributions. o Districts will not have to set up the employee as non-member with a retirement plan code of N1 or A1 N6 or A6 for the first month of employment. Galaxy will automatically change those retirement plans to S1 on the first of the following pay period. (See following pages in this section for a DFS Notify sent to districts regarding the addition of the A6/N6 retirement plans to Galaxy.), and then change the employee to member with retirement plan S1. August 2018 Section 310-2

7 310- Mandatory Qualifications CalSTRS Manual August 2018 Section 310-3

8 310- Mandatory Qualifications CalSTRS Manual August 2018 Section 310-4

9 315- Permissive Election CalSTRS Manual Permissive Election What is it? The Permissive Election ES350 is the form part-time and substitute educators use to elect membership into the Defined Benefit Program. The form is used to elect into the Defined Benefit Program and it serves as an acknowledgement of receipt of CalSTRS Defined Benefit Program information. An employee who performs creditable service and is excluded from membership may elect membership at any time- even if the employee declined membership in the past. To elect membership, the non-member employee must use the Permissive Election Form ES 350. Notify New Employees New part-time and substitute employees must be notified of their right to elect CalSTRS membership within 30 days of the hire date. Employers must also give information about CalSTRS retirement programs. If the new employee is not notified, the employer may be liable for employer and employee contributions and interest, as well as audit costs if an audit reveals noncompliance. Once the permissive election is made, membership can be cancelled only by terminating all creditable service and receiving a refund of contributions. References Education Code sections, 22515, Administrative Directive Senate Bill 1352: Effective January 1, 2017 ES 350 Permissive Membership forms must be received by CalSTRS within 30 days of the employee s signature date. Membership date is the first day of the pay period following the election. Employees with a 50%-99% contract will automatically become members the first pay period following their hire date unless they are already members. o The ES 350 can no longer be used to allow less than 100% contract employees to be CalSTRS members on the first day of hire. Source: CalSTRS Employer Reporting Handbook FY13-14 August 2018 Section 315-1

10 315- Permissive Election CalSTRS Manual Permissive Election, Continued Job Aid Use this Permissive Election table for guidance: Maintain a copy of the ES350 Written acknowledgment of receipt of CalSTRS Defined Benefit Program information by the employee shall be maintained in employer files on a form (ES350) provided by CalSTRS. Source: CalSTRS Employer Reporting Handbook FY13-14 August 2018 Section 315-2

11 315- Permissive Election CalSTRS Manual Processing Permissive Membership (ES 350) Forms Example 1: A 45% contract employee is hired January 10, with their first payroll to be paid January 31, on the 7M. There is no mandatory membership for employees who are hired for less than 50% contract. The ES 350 form must be given to the employee to elect/decline membership. The employee signs the ES 350 form on January 10, 2017: If membership is elected, membership is effective February 1, o Retirement earnings for the 7M payroll are reported with a N6 or A6 retirement plan. o Retirement earnings for the 8M payroll are reported with an S1 retirement plan. If membership is declined, employee is setup as a non-member effective January 1, o Use an N2 or A1 retirement plan during set-up in Galaxy. o The rule is different when membership is declined; former process is followed. All hours/days worked are monitored for possible future mandatory qualification into membership. Example 2: A substitute teacher is hired December 15; they complete an ES 350 form electing membership and sign the form on January 5, 2017: Retirement unit sets up the employee with a February 1, 2017 membership date. o Note: If any earnings are paid to this employee for December, the ES 350 received with a January 5, 2017 date forces the STRS unit to reach out to the district and ask for an ES 350 with a revised signature date reflecting December. DFS Permissive Membership (ES 350) Forms- Other Reminders Use the most current version of the ES 350 form (currently it s the February 2017 version). Once a member, always a member unless the employee terminates employment with all California school employers and requests a refund of all contributions made. Check the Secured Employer Website for employee s status with CalSTRS when hiring new employees and for current employees who begin performing creditable duties for your district. Do not give the Permissive Membership form to CalSTRS retirees. o Retirees don t have the right to permissively elect membership. The employee s signature date in the ES 350 form should not be earlier than the employee s official hire date with the district. An employee who performs creditable service and does not mandatorily qualify for immediate membership may elect membership at any time, even if the employee declined membership in the past. For K-12 and charter schools: Employees who decline membership may mandatorily qualify for membership. o A part-time employee, who works 60 hours or more in a single pay period at the same district, becomes a DB member on the first day of the following pay period, unless the following pay period is in a new fiscal year. (Retirement plan 55.) o A non-member substitute who works 100 or more days in one district becomes a DB member on the first day of the following pay period, unless the following pay period is in a new fiscal year. (Retirement plan 54.) August 2018 Section 315-3

12 315- Permissive Election CalSTRS Manual For community colleges: A temporary or part-time employee mandatorily qualifies only when their employment status changes to permanent; the 60 hour/100 day rule does not apply for community colleges. Social Security Form SSA-1945 Statement Concerning Your Employment in a Job Not Covered By Social Security should be provided to all employees who do not contribute to social security. This includes employees who: o Qualify for immediate CalSTRS membership. o Permissively elect membership into CalSTRS. o Qualify for CalSTRS membership by meeting the 60 hour/100 day threshold. o Contribute in an alternative retirement plan like PARS or Apple. Returned ES 350 Forms Many ES 350 forms are unnecessarily completed. For example, an employee completes the ES 350 form and permissively elects membership at district A, but membership was established at district B six months ago; or an employee declines membership at new district, but they had already elected membership with a previous employer. DFS is not returning these forms to the district, but an notification will be sent to the district if STRS staff changes an employee s retirement plan in Galaxy. o Review these changes and contact the STRS unit if you have any questions. ES 350 forms will only be returned to the district when they are valid, but cannot be processed due to missing information. The ES 350 form will be returned to the district with the following cover letter. It is imperative that the forms are returned to DFS in a timely manner so earnings can be submitted to CalSTRS timely and minimize the assessment of P&I charges August 2018 Section 315-4

13 315- Permissive Election CalSTRS Manual SAMPLE Use the latest version of the form. Name should match the employee s name as shown on the employee s social security card. Write the social security number in full. Make sure the employee makes a selection by checking one of the two boxes, and that they sign and date the form. Signature date should be in the month of hire. Preferably, form should be signed by Payroll or HR Supervisor. Leave blank. Leave blank. Membership date will be the first day of the pay period following the election. Do not mail to CalSTRS. Forms are processed by the STRS unit in DFS. August 2018 Section 315-5

14 315- Permissive Election CalSTRS Manual Missing & Invalid Permissive Membership Forms August 2018 Section 315-6

15 320- Independent Contractors CalSTRS Manual June 2017 Section 320-1

16 320- Independent Contractors CalSTRS Manual June 2017 Section 320-2

17 320- Independent Contractors CalSTRS Manual Reporting Earnings for STRS Retirees STRS retirees performing service that is creditable to the CalSTRS system must be reported to CalSTRS. Retirees are usually hired as consultants and paid through accounts payable. The form below can be used to submit earnings information to the Retirement Unit in District Fiscal Services. Unreported retiree earnings is a common STRS audit finding and can potentially affect the retirement benefits of retirees if they exceed the post retirement earnings limitation for the fiscal year. Reminder- Education Code section precludes retired CalSTRS members from employment in classified positions in the California public school system. June 2017 Section 320-3

18 CalSTRS/CalPERS- Right of Election Right to Elect See the Reminders section Compare Systems Employers are required to notify employees of their right to elect to stay with their retirement system within 10 working days from date of hire. The employee has 60 days from the date of hire to elect. If no election is made, the service will be reported to the system it belongs. The form used for election is the Retirement System Election form (ES 372). The election becomes effective on the first day that service is performed in the new position. Compare and know the difference of each system s defaults CalSTRS member takes a position covered by CalPERS CalPERS member takes a position covered by CalSTRS Member Member working a classified position in the school district, community college district, County Office of Education and that position qualifies for PERS or Member becomes employed by the state to perform qualifying classified service, these positions are: represented by a state bargaining unit that represents educational consultants, professional educators, or librarians or supervising or managing work similar to above positions Either employed by a: school district, community college, county superintendent, Department of Education, or Has five years of service and becomes employed to perform certificated service If not vested (less than 5 years of service credit), to qualify for the right of election, an employee must be coming from active employment with a break in service not exceeding 180 calendar days. After Retirement Generally, a CalSTRS retiree cannot accept a classified position However, under certain circumstances, a CalSTRS retiree may work as a teacher s aide or provide one-on-one instruction in a remedial class Generally, a CalPERS retiree can accept any position in a school district However, in certain cases the retirement allowance will be terminated if service (classified or certificated) exceeds 960 hours in a fiscal year Contact CalPERS for more information on CalPERS retiree earnings limitation Source: CalSTRS Employer Reporting Handbook FY13-14 August 2018 Section 325-1

19 CalSTRS/CalPERS- Right of Election, Continued Publication Provide employees with written information about each system s benefits. CalSTRS recommends the publication: Join STRS? Join PERS? Available in SEW in Forms & Publications link. Contact CalPERS for their information concerning system elections information. ES 372 Form ES 373 Form The County Office of Education must submit the original ES 372 Retirement System Election Form to the System that has been elected, provide a copy to the other System, and provide copies to member and employing school district. The acknowledgment has been incorporated in the ES 372 Retirement System Election form The ES 373 Acknowledgement of Receipt of Election Information Form is to be kept only in the employee personnel file. References Education Codes sections 22508, 22509, 45134, Employer Directives and Employer Circular Volume 25, Issue 11, August 5, 2009 January 2017 Update: In the past, once an employee had made the right of election at a district, that election was irrevocable for all future employment at the district. Effective July 2016, CalSTRS allows employees to make a new election anytime an employee takes a new position that requires membership in a different retirement plan. Source: CalSTRS Employer Reporting Handbook FY13-14 August 2018 Section 325-2

20 Updated Guidance on Processing Retirement System Elections August 2018 Section 325-3

21 August 2018 Section 325-4

22 August 2018 Section 325-5

23 SAMPLE August 2018 Section 325-6

24 Reminders Please contact our office if you have a situation where you think a Retirement System Election form may apply. The Retirement Unit will give your district a preliminary decision based on the information that is provided. Upon receiving the proper documentation from the district, a more comprehensive review will take place. Unless given guidance directly from the DFS Retirement Unit, set the employee s retirement plan in Galaxy to the system that covers the position. Once the Retirement System Election form (ES 372) is received by the district, follow the employee s election and immediately forward the ES 372 form to the STRS Unit in DFS. Use the most recent version of the form (currently it s the February 2017 version). Please submit the original form via regular mail; do not fax. Forms must be received by CalSTRS within 30 days of the employee s signature date. However, please keep in mind the Retirement Unit in DFS is required to review all ES 372 forms. It is critical that DFS receives the ES 372 as soon as possible following the employee s signature date. If the retirement plan is changed in Galaxy, but a form is not completed, a review of the employee s election cannot be performed. If the employee s retirement plan was changed erroneously, a transfer between retirement systems may be necessary which may include a refund or charge in retirement contributions made, and possibly a refund or charge for payroll taxes owed. After the form is received by the DFS STRS Unit and it is determined that an employee qualifies for the right of election, the form will be signed by DFS and submitted to both retirement systems. A copy is kept in our office and a copy mailed to the district. The district s copy will include a cover letter notifying the district that the form was processed and submitted to CalPERS/CalSTRS. If it is determined by DFS that an employee does not qualify for the right of election, the form is returned to the district with an explanation of why the employee does not qualify for the right of election. A copy is kept by the DFS Retirement Unit for our records. Incomplete or invalid forms may be returned to the district for further action before they can be reviewed or submitted to the retirement systems. Forms are usually returned to districts for the following reasons: The form used is outdated. The form is incomplete. The form is a copy. The employee did not sign the Retirement System Election form. The form was not signed by the district s payroll/personnel supervisor. August 2018 Section 325-7

25 District Notification Form- Right of Election Returned for Further Action August 2018 Section 325-8

26 District Notification Form- Right of Election Form Has Been Processed August 2018 Section 325-9

27 Certificated Positions Deemed Classified A position designated as certificated by the district does not automatically qualify for STRS membership; the duties that are required to be performed by the employee dictate if the position is deemed certificated or classified Update: This position was re-evaluated by CalSTRS as potentially meeting the definition of creditable service. See Employee Directive , on page August 2018 Section

28 Certificated Positions Deemed Classified, Continued August 2018 Section

29 August 2018 Section

30 August 2018 Section

31 August 2018 Section

32 Dual Membership Employees may hold CalSTRS and CalPERS membership simultaneously. Employees may be in retirement status with one system and be in active status in the other. Employees may be in retirement status with both systems. Employees may be active in both systems. Districts: Check employee status with both systems to make sure employees retirement plans are set up correctly at the time of hire. Classic PERS Membership and New STRS Membership (Formula Changes) An employee, who was a PERS member on or before December 31, 2012, and performed service in that system within 180 days of becoming a CalSTRS member, is eligible to retain the 2% at 60 retirement formula with CalSTRS. Starting in February 2018, the DFS Retirement Unit reviews mycalpers and CalSTRS SEW to determine if an employee may be eligible for the 2% at 60 formula. This review takes place when DFS is establishing membership for an employee in CalSTRS for the first time. Since the retirement formula defaults to 2% at 62, DFS must send a formal request to CalSTRS if an employee is eligible to begin the process of updating the employee s retirement formula. CalSTRS requires the information below to be provided: Nature of request. Member name. Date of birth. CalPERS membership date. CalPERS employment end date. CalPERS refund date (if applicable). Last day worked in a CalPERS covered position. Previous position title. CalSTRS membership date. Begin or hire date in the CalSTRS covered position. New position title. DFS can only review eligibility for employees coming from active employment within Riverside County schools. If the employee is eligible from service performed in another county, the district must request from the employee a copy of the employee s CalPERS statement and their last two pay stubs. Submit to DFS along with a letter (see template on next page). Documents will be forwarded to CalSTRS for review. August 2018 Section

33 Sample of District Letter to Request an Update to an Employee s Retirement Formula CalSTRS will notify the Retirement Unit in DFS that the formula change has been approved: If necessary, DFS will reverse all earnings and contributions already reported at the 2% at 62 contribution rate and allow the reversing lines to post with CalSTRS. DFS will then notify CalSTRS that the reversing lines have posted in the Secured Employer Website. CalSTRS will change the retirement formula to 2% at 60 and notify DFS to resubmit the earnings and contributions. Currently, the contribution rate for employees with retirement formula 2% at 60 is higher. This change will cause a charge to the district for the balance of contributions due: o 2% at 62 rate for FY 18-19: % o 2% at 60 rate for FY 18-19: % August 2018 Section

34 Failure to Provide Form to Employees An employee who has already made contributions to the CalSTRS system for a classified position, for which the Retirement System Election form was not completed, may still have the opportunity to continue contributing to the CalSTRS system. Prepare a justification letter explaining why the district did not offer the Retirement System Election form when the employee qualified to make such election. The justification letter should explain the circumstances, as detailed as possible, and identify the following: Member s name and CalSTRS client identification number or social security number. Previous position(s): Title, position end date, employer name and report unit code (district number). Current position: Title, position effective date, employer name and report unit code (district number). If CalSTRS accepts the district s petition, the earnings will continue to be reported to the CalSTRS system. If CalSTRS denies the employer s petition: Earnings are backed out of the CalSTRS System. Earnings are reported to the appropriate system (usually CalPERS) with contributions unless employee is in retirement status with CalPERS. Difference in employee and employer contributions will be calculated and collected/refunded from the district. Earnings are now eligible for FICA taxes which will be calculated and charged to the district (up to 3 years, 3 months and 15 days). A MAR (Member Action Request form) will be required from the district to set up the CalPERS appointment ID. If an employer is not able to prove that the right of election was given to the employee (by producing a copy of the ES 372 or ES 373 form(s) from the employee s file), CalSTRS will request a transfer of earnings to the appropriate retirement system, CalSTRS or CalPERS. CalSTRS issued Employer Directive Grandfathering Misreported Service. In this circular, CalSTRS states that any service performed for activities deemed not creditable, would be grandfathered as creditable service as long as the activities were performed for an employer on or before December 31, 2015 and were reported to CalSTRS as creditable service. This would be in effect until the employee becomes employed by the same or different employer in a different position on or after January 1, Future employees assigned these non-creditable positions must be reported to the appropriate system. August 2018 Section

35 STRS to PERS/PERS to STRS Transfers Transfers between retirement systems may be unavoidable since employees have 60 days to make an election. However, most transfers are required due to misunderstanding or unawareness of the specific requirements associated with the right of election. The transfer of earnings and contributions between the two retirement systems is cumbersome and may take months for all adjustments to be completed. It involves numerous individuals to complete all the tasks: The district staff. The employee. The PERS Unit in DFS. The STRS Unit in DFS. CalSTRS rep, possibly. CalPERS rep, possibly. The Payroll Unit in DFS. When a retirement system transfer issue arises, expect the following chain of events: District is notified when an employee does not have the right of election. An adjustment is made to delete, or reverse retirement records from the retirement system the employee was erroneously assigned. o Districts can find record of the adjustment in the STRS Control Sheets, under the column title STRS/PERS PERS/STRS Transfers. An inter-fund transfer is completed to move the funds from one retirement plan to the other. A transfer worksheet is completed and routed between the STRS, PERS, and Payroll Units for all pertinent tasks to be completed (see page for a sample of the STRS/PERS Transfer Template). When both retirement systems have been adjusted, districts will receive a copy of this form with all supporting documentation. If payroll tax adjustments are required, the Payroll Unit will send separate documentation. o Due to strict tax reporting requirements, these adjustments may only happen once a quarter. Districts may receive payroll tax corrections several months after the retirement records have been adjusted. August 2018 Section

36 STRS/PERS Transfer Template August 2018 Section

37 Retirement System Election and Other Required Documents The right of election affects multiple processes, which when not properly addressed, may result in further financial corrections. In order for all tasks to be accurately completed, additional forms may be required from the district. Examples are: A Member Action Request (MAR) form for CalPERS separation. A MAR for CalPERS appointment. An ES 350 for Permissive Membership. CalPERS Member Reciprocal Self-Certification Form. CalPERS Employment Separations: When employees terminate employment with a district, their CalPERS appointment must be separated so employees can be correctly identified as classic or new members when they are subsequently employed at another agency; the separation triggers the 6 month break in service count that can potentially treat a classic member as a new member when employed at another agency. CalPERS New Employee Appointments: Timely set up of new appointments avoids the $500 employer administrative fee charged per employee. Although it ultimately is the employees responsibility to ensure their retirement formula is correct with CalSTRS, it is in the district s benefit to ensure the retirement formula is correctly set up to avoid future charges for incorrect rate contributions. The following are examples of right of election scenarios and the documentation required for each example. August 2018 Section

38 Right of Election with the Same Employer January 2017 Update A member of CalSTRS who becomes employed in a new position by the same or a different school district, a community college district, etc. to perform service that requires membership in a different public retirement system will have that service credited with that other public retirement system unless he/she files a written election (within 60 days after the date of hire) to have that service covered by CalSTRS. As of July 2016, the election is no longer irrevocable for all future employment with the same district; an employee may need to be provided the Retirement System Election form due to a change in position. Examples- Right of Election Scenarios A. District employee paying PERS on a classified position and has 5 years of PERS service credit (vested), accepts a certificated position that qualifies for immediate STRS membership (100% contract). Employee elects STRS on the newly certificated position. Required documents: 1. ES 372 electing STRS. a. STRS membership is effective the date the certificated position is taken. b. STRS staff will set up the employee s STRS account per the ES 372 form, if needed. 2. MAR for separation if employee will not continue to perform classified duties for the district. B. District employee paying PERS on a classified position and has 5 years of PERS service credit (vested), accepts a certificated position that does not qualifies for immediate STRS membership (50%-99% contract). Employee has no prior STRS membership. Employee elects STRS on the newly certificated position. Required documents: 1. ES 372 electing STRS. a. STRS membership is effective the first day of the following pay period. b. STRS staff will set up the employee s STRS account per the ES 372 form, if needed. 2. ES 350 Permissive Membership for the first month electing to pay into CalSTRS. a. Employees with a 50% - 99% contract do not qualify for immediate membership until the first day of the following pay period. b. The ES 350 allows the employee to immediately pay into CalSTRS. Changed by SB First month of employment is reported as non-member earnings to CalSTRS. August 2018 Section

39 Examples- Right of Election Scenarios, Continued C. District employee paying PERS on a classified position and has 5 years of PERS service credit (vested), accepts a certificated position that qualifies for immediate STRS membership (100% contract). Employee elects PERS on the newly certificated position. Required documents: 1. ES 372 form electing PERS. a. PERS membership effective as of the day the certificated position is taken. b. Hire date and effective date of position which requires membership in a different retirement plan may not be the same. 2. MAR form for appointment--appointing the certificated position. D. District employee paying PERS on a classified position and has 5 years of PERS service credit (vested), accepts a certificated position that does not qualify for immediate STRS membership (50% - 99% contract). Employee elects PERS on the newly certificated position. Required documents: Changed by SB First month of employment is 1. ES 372 electing PERS. automatically reported as non-member earnings to CalSTRS. a. PERS membership effective the first day of the following pay period. b. Employees with a 50%-99% contract do not qualify for immediate STRS membership until the first of the following pay period so the employee does not qualify for the right of election. 2. ES 350 Permissive Membership declining STRS membership as of the date of hire into the certificated position. a. The first month s earnings are reported to CalSTRS without contributions. b. Caution: the employee must decline CalSTRS membership when completing the ES 350 form for the first month s earnings. The employee loses the right of election if he elects permissive CalSTRS membership when completing the ES 350 form. 3. MAR form for appointment- appointing the certificated position. a. The appointment effective date should be the date the member became eligible to make the election, not the date the employee took the position. August 2018 Section

40 Examples- Right of Election Scenarios, Continued E. District employee paying PERS on a classified position and has 5 years of PERS service credit (vested), accepts a certificated position that does not qualify for immediate STRS membership (less than 50% contract). Employee has no prior STRS membership. Employee does not have the right of election. 1. Employee must complete the ES 350 Permissive Membership form electing or declining STRS membership. a. If employee declines permissive membership, employee may still mandatorily qualify for STRS membership if the 60 hours/100 day threshold is met. 1. Employee may then have the right of election only if mandatory membership was met within 60 days if the employee taking the certificated position. b. If employee accepts permissive membership with CalSTRS, membership is effective the first day of the pay period following the election. Changed by SB 1352 F. District employee paying into PERS on a classified position, has less than 5 years of PERS service credit (not vested), accepts a certificated position that mandatorily qualifies for STRS membership, and has a break in service not exceeding 120 days between the classified and certificated position. Employee does not have the right of election; employee must be vested or come from active employment. Report employee s earnings to CalSTRS. 1. If certificated position is 100% contract: Mandatory STRS membership as of the hire date in the certificated position. 2. If certificated position is 50%-99% contract: Membership is not effective until the first of the following pay period unless an ES 350 form is completed electing membership as of the hire date in the certificated position. 3. If certificated position is less than 50% contract: No mandatory STRS membership. Employee must be given the ES 350 Permissive Membership form. a. Employee may elect STRS membership and will be effective the first day of the pay period following the election. b. If the employee declines membership, employee is setup with STRS as a nonmember effective the first day of the month the election is made. c. Employee may qualify in the future for mandatory membership by reaching the 60 hour/100 day threshold. August 2018 Section

41 Examples- Right of Election Scenarios, Continued G. District employee paying into PERS on a classified position, has less than 5 years of PERS service credit (not vested), accepts a certificated position and has no break in service between the classified and certificated position. Employee qualifies for the right of election because although not vested, employee is coming from active employment. 1. Employee should be given an ES 372 Right of Election form. H. District employee paying PERS on a certificated position accepts another certificated position that qualifies for STRS membership. 1. Employee should be given a new ES 372 Right of Election form. Changed July Election no longer irrevocable for all future employment with the same district. I. District employee paying STRS on a certificated position, accepts a classified position that qualifies for PERS membership. Employee elects PERS on the newly classified position. Required documents: 1. ES 372 electing PERS. a. PERS membership is effective the date the classified position was taken. 2. MAR form for CalPERS appointment setup with the certificated position. a. PERS staff will set up the employee s PERS account per the MAR form. 3. CalPERS Member Reciprocal Serf-Certification Form so the employee can default to classic membership if they qualify. J. District employee paying STRS on a certificated position, accepts a classified position that qualifies for PERS membership. Employee elects STRS on the newly classified position. Required documents: 1. ES 372 electing STRS. a. A new STRS appointment is not needed; the employee is already a STRS member. b. Do not submit a MAR for appointment into PERS if the employee chooses STRS. August 2018 Section

42 WHEN AN EMPLOYEE ACCEPTS A NEW CERTIFICATED POSITION August 2018 Section

43 WHEN AN EMPLOYEE ACCEPTS A NEW CLASSIFIED POSITION August 2018 Section